Good pay is the key to attracting workers, but don't overlook promotions as a way to retain them in 2024...

Pay is important, but it's not singular in what drives employees to stay," Matt Sigelman, president of the Burning Glass Institute, tells HR Brew. If you're an HR professional worried that valuable talent is heading for the exit, raising pay is often seen as the most promising mechanism for keeping employees around.

That's still the case, according to a new report from the American Opportunity Index (AOI), which measures how large US employers "drive economic mobility and positive career outcomes for their employees." In a survey of more than 500 employees of Fortune 500 companies conducted by AOI in October, "competitive wages and benefits emerged as among the highest priorities," according to a report released on Nov. 30.

But HR leaders shouldn't overlook another powerful retention lever, the report found: Promoting workers from within.

Internal promotion can drive retention. The AOI survey found not only that employees prioritize competitive wages and benefits, but also "lots of opportunities to advance in the workplace." Some 92% of workers surveyed rated this as important or very important.

This bears out in AOI's employer rankings, which draw upon data from a variety of sources including Glassdoor, Lightcast, and the Burning Glass Institute, one of the founding partners of the index. Employers with a "strong track record of internal promotion" tended to see this driving retention, AOI found. Taken together, high pay and promotion can help both attract and retain workers, AOI posits.

"Pay is important, but it's not singular in what drives employees to stay," Matt Sigelman, president of the Burning Glass Institute, told HR Brew. "When we looked at what correlated with retention, promotion was a close second, in terms of the effect that it had."

How employers rank on pay, promotions.

The index, which looked at 396 employers in the Fortune 500, assigned companies a score from 1 to 4 based on a number of metrics, including hiring, pay, promotion, parity, and culture. The employers that ranked in the top 100 tended to perform well across these metrics, though even the highest-ranking companies show areas for improvement.

The food manufacturer J.M. Smucker, for example, ranked No. 2 overall and received a score of 4 for both pay and promotion. But the company only received a score of 1 for parity, which the report defines as "how well…companies move all people up equally, regardless of race or gender."